Development of NTA (National Transfer Accounts) Sang-Hyop Lee University of Hawaii at Manoa East-West Center
November 13, 2014 NTA 10, Beijing, PRC
IO L R S F ER C C OU S
N
I ON L R NS F E R C C OU N S
N T I ON L T R NS F E R C C OU N T S
N A T I ON A L T R AN S F E R A C C OU N T S
Two Directors
Key Issues • How population change influences the economy and society (current and future) • What policies can be pursued to influence the outcome—research provides policy tools!
National Transfer Accounts • The goal is to improve our understanding of the generational economy • Describes the age patterns of economic activity and the economic relations between the generations • Quantifies how each age group acquires and uses economic resources • Constructed using existing data (population estimates, surveys, administrative records, macroeconomic data) • Consistent with UN System of National Accounts.
Many Offspring (TFR=over 100)
NTA is comparative: Regional structure NTA Members Asia-Pacific
Americas
Europe
Africa
Australia
Argentina
Austria
Benin
Bangladesh
Brazil
Finland
Ghana
Cambodia
Canada
France
Kenya
China
Chile
Germany
Mozambique
India
Colombia
Hungary
Nigeria
Indonesia
Costa Rica
Italy
Senegal
Japan
El Salvador
Luxembourg
South Africa
Philippines
Jamaica
Netherlands
South Korea
Mexico
Poland
Taiwan
Peru
Russia
Thailand
United States
Slovenia
Vietnam
Uruguay
Spain Sweden Turkey United Kingdom
The continuing effort has been supported by many funders • • • • • • • • • • • •
National Institute on Aging (NIA) Bill and Melinda Gates Foundation International Development Research Center (IDRC), Canada UN Fund for Population Activities (UNFPA) UN Population Division East-West Center, Hawaii Center for the Economics and Demography of Aging, UC Berkeley Asian Development Bank Japan: MEXT.ACADEMIC FRONTIER MacArthur Foundation European Union In-country support from governments and other funders in many countries
Global Meetings 10th Beijing, China, Nov 10-14, 2014 9th Barcelona, June 2013 8th Rio, Brazil, December 2011 7th Honolulu, June 11-12, 2010 6th Berkeley, January 9-10, 2009 5th Seoul, Korea, November 5-6, 2007 4th Berkeley, January 19-20, 2007 3rd Honolulu, January 20-22, 2006 2nd Berkeley, January 2005 1st Berkeley, January 2004
After more than a hundred articles by project members, the first book from the project is out
Manuals, more articles, etc.
Outcomes from NTA • Data improvement • Research and policy awareness – Comparative or country specific
• Capacity building – Global meetings – Regional meetings – Technical/training workshops
17
The Economic Lifecycle
Per Capita Consumption and Labor Income
600
Labor Income
500 400 Consumption
300 200
Large deficits at young and old ages.
100 0 0
20
40
60 Age
80
Aggregate flows, Nigeria 250000 Net cost of children (<25) is 87% of the total labor income of adults 25+
Naira (millions)
200000 150000
Net cost of elderly is very small
100000 50000 0 0
10
20
30
40
50
60
70
Age Consumption
Labor income
80
90+
Human capital spending, Nigeria 250000
Naira (millions)
200000 150000 100000 50000 Only 20% of 0 spending on 0 children goes to human capital (health and education)
10
20
30
40
50
60
70
80
90+
Age Consumption
Human capital spending
Labor income
Fertility/human capital tradeoff Human capital spending (% average annual income age 30–49)
Africa South, Southeast Asia
600
East Asia Europe, Australia, United States
500
Latin America, Caribbean
400 300 200 100 0 0.0
1.0 2.0 3.0 4.0 5.0 Total fertility rate (children per woman)
Updated from NTA database www.ntaccounts.org
6.0
Support ratio, China 1
0.9
Net swing of 1.2% per year in per capita growth due to population age structure
0.8
0.7
0.6 1940
Plus 0.8% per year 1960
1980
2000
Minus 0.4% per year 2020
2040
2060
Annual growth of support ratio, NTA economies, 2010–2050
The economic lifecycle, aggregate flows (United States) 250000
150000 100000 50000 0 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90+
US$ (millions)
200000
Consumption
Age Labor Income
Sources of funding consumption (support system)
• Labor income • Transfers
– Familial transfers – Public transfers • Social security system
• Asset-based reallocations – Interest, dividends, rent from personal assets – Home – Dis-saving
Saving Capital-based transformation
Social welfare transformation Traditional society?
Familial Transfers
Public Transfers
Evolution of old-age support system
IN
Assets
PH MX
1/3 US
TH 2/3
UY
KR JP 1/3
TW
CH
ES CRDE 2/3 CL
BR
SI AT HU Family transfers
2/3
Asia
1/3
Europe & US
Latin America
Public SE transfers
Consumption by Sector (Korea) Public Education
Private Education
9,000,000
Public Other
Private Other
8,000,000
Public Health
Private Health
7,000,000
Korean Won
6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 0
5
10
15
20
25
30
35
40
45 Age
50
55
60
65
70
75
80
85
90+
Consumption by Sector (Sweden) 500,000 450,000 400,000
Swedish Krona
350,000
Public Education
Private Education
Public Other
Private Other
Public Health
Private Health
300,000 250,000 200,000 150,000 100,000 50,000 0 0
5
10
15
20
25
30
35
40
45 Age
50
55
60
65
70
75
80
85
90+
Social welfare target (Thailand), constrained
Summary: NTA research areas • • • • • • • •
Demographic dividend Economic growth and saving Fiscal sustainability Intergenerational equity Implications for gender issues and inequality Human resources (healthcare and education) Responsibilities of private vs. public sector Retirement and pension issues
Concluding remarks • Our economic systems are being tested by unprecedented changes in population age structure • Stakes are very large: Economic growth, generational equity, economic security for children and elderly, and sustainability of support systems • Complex systems are involved: Governments, labor markets, families, financial markets, and health-care systems • It is essential that policy be informed by the best possible data linking population and the macroeconomy
Thank you
